Disability Insurance
Disability Insurance

Disability Insurance

If you were too sick or hurt to work, would you have enough money saved to cover your fixed expenses? Things like the mortgage and your electric bill do not go away when your income stops.

A professional plan is an indemnity contract, which pays the insured a monthly benefit when the insured meets the definition of Total disability, Partial disability, or Residual disability. This means that the plan is designed to replace the income that you have lost due to your disability.

The Professional Plan is preferred by physicians / surgeons and other professionals since it is designed with the broadest of definitions, and has the potential to pay the largest monthly proceeds. Benefits are received starting with the first day following a predetermined elimination period (generally 30, 60 or 90 days).

Benefits are usually either paid until age 65 when you would have retired, or until you are able to return to work. In most cases, the benefits are received tax-free and the premiums paid are not tax deductible. In some cases however, an incorporated professional may opt to receive taxable benefits if they qualify using a Wage Loss Replacement Plan. The WLRP is gaining popularity however the tax-free benefit is still preferred by clients.

Disability Plans:

Living Benefits Atlantic deals in the Professional Series of products designed to meet the needs of physicians, professional engineers, lawyers, and others. Your benefits are calculated based on the income declared on your most recent tax return. You can take a look at our disability benefit calculator to see how much your income qualifies you for.

There are many options that can be added to your disability insurance plan. A brief overview of the most popular ones follows.

Future Income Option (FIO)

The FIO is a feature which provides a guarantee to increase your coverage in the future. As each option is exercised you will not have to provide proof of good health. The option will continue to be offered in the future which helps your policy keep pace with your growing income. Without this option, medical proof would be required with every increase..

Cost of Living Benefit (COLB)

The COLB is linked to inflation by the Consumer Price Index. If chosen, COLB will adjust your disability benefits according to inflation. This means that your nominal benefits will increase with inflation, while your real benefits remain constant over time. In this way, the purchasing power of your disability benefit dollars remains the same.

Own Occupation

When deciding which disability insurance product to purchase, one must choose whether they want to be protected against not being able to work or not being able to do the job that they trained for. Own occupation protects against the latter. For example, if you are a surgeon who can no longer perform surgery due to hand tremors and go back to school and become a lawyer, you will still get your full benefits for not being able to work as a physician.

Common periods are 30, 60 and 90 days of elimination.